The percentage Icelandic banks (by memory) have had on normal deposit accounts, locked somewhere between 3-36 months has been around 2-3% over the last few years, and effectively 0% on checking accounts.
Now, with inflation running rampant, the percentages have reached up to 7+% (Central Bank interest rates are 7.5% and inflation measures at 9.9%).
I am in the privilaged position to be able to gain more in interest on a considerable deposit at a local bank (which is unlocked I might add) then what my total monthly mortage interests now come to (close to 1.8x). In addition since the mortage allows for direct deposits into the principal without incurring any additional cost, each Krona that gets put into it has effectively the same buying power as when the loan was initially taken.
I've always found it rather fitting that two previous European colonizers had a previous colony (though not one of theirs) do a bit of modern day financial pillaging on their shores.
In the end though, they did get paid back all that they were owed. So all ended well.
I wonder if the same can be said about any of their former colonies though...
Regarding 1.8x, what is your tax rate? I have the same situation in Canada but my marginal tax rate is approx 50%. As such, it is better for me to pay down my mortgage (through early payments).
Now, with inflation running rampant, the percentages have reached up to 7+% (Central Bank interest rates are 7.5% and inflation measures at 9.9%).
I am in the privilaged position to be able to gain more in interest on a considerable deposit at a local bank (which is unlocked I might add) then what my total monthly mortage interests now come to (close to 1.8x). In addition since the mortage allows for direct deposits into the principal without incurring any additional cost, each Krona that gets put into it has effectively the same buying power as when the loan was initially taken.
It is a peculiar state of affairs.